South Africa Offers Starlink Workaround Of Its Black-Ownership Laws

The South African government will alter its Black Economic Empowerment (BEE) regulations to allow Starlink to operate in the country. Bloomberg reported that the offer came at a last-minute meeting on Tuesday, 21 June.

Foreign investors in South Africa’s telecom sector are required to allocate 30% of a project’s equity to Black-owned businesses to obtain a license. However, Elon Musk’s satellite internet provider will be allowed to meet BEE requirements through equity-equivalent investments instead.

South Africa’s Workaround for Starlink

South Africa created the BEE laws to address racial inequalities stemming from apartheid. The policy is supported by the African National Congress Party (ANC), a political party in South Africa known for its opposition against apartheid.

Under the equity-equivalent model, companies like Starlink can meet BEE ownership requirements by investing in initiatives such as infrastructure development or workforce training, particularly in underserved rural areas.

The automotive industry adopted for a similar workaround in 2019, with major manufacturers including BMW, Ford, and Toyota participating in an equity-equivalent program to fulfill BEE obligations.

Responses to the decision

Investors welcomed the news, with South Africa’s currency, the rand, strengthening 0.7% against the dollar. However, Black Business Council CEO Kganki Matabane criticized the decision in an interview with broadcaster Newzroom Afrika. “We should stick to the laws,” he said, “because if we allow one company to circumvent the legislation, then we must allow all the other companies, and then we’re going to have lawlessness in South Africa.”

Vodacom had also recently expressed support for the Independent Communications Authority of South Africa (ICASA) in its efforts to block Starlink from operating in the country. It stated that satellite operators, such as Starlink, should be held to the same standards as other terrestrial operators who must comply with local ownership rules.

Starlink’s Regulatory Struggles in Africa

Starlink has faced a few issues with its operation in Africa. Samuel George, Ghana’s minister for communication, digital technology, and innovations, recently gave Starlink one month to comply with national regulations. The company does not have a physical office or customer support system in Ghana, and the government wants that to change.

Musk’s company received a 10-year license to operate in Lesotho. However, it faced significant backlash over local equity. A rights group called Section 2 wanted Starlink to give 30% of its ownership to Basotho citizens before obtaining a license to operate. 

In March, Musk claimed that Starlink cannot operate in South Africa because he isn’t Black, writing on X, Musk said, “Starlink is not allowed to operate in South Africa, because I’m not black.”

Senior official at the foreign affairs department, Clayson Monyela, responded, “Sir, that’s NOT true, and you know it! It’s got nothing to do with your skin colour. Starlink is welcome to operate in South Africa provided there’s compliance with local laws.”

Image: Getty